US equity futures slipped 0.1% ahead of key inflation data, as progress in US‑Iran talks eased geopolitical risks but kept oil markets volatile.

Key Highlights

  • S&P 500 futures (CME: ES=F) dipped 0.1% as investors weighed geopolitical developments and upcoming inflation reports.
  • Japan’s Nikkei 225 (TSE: ^N225) rose 1.8%, extending last week’s near‑8% gain on semiconductor demand.
  • Core PCE inflation data due Thursday will test the Federal Reserve’s higher‑for‑longer rate stance.
  • European natural gas prices climbed as much as 3.9% on supply concerns linked to regional tensions.

Geopolitical Thaw Lifts Sentiment

US stock futures showed modest declines early Monday, with the S&P 500 (CME: ES=F) slipping 0.1% after Iran announced “encouraging progress” in peace talks with Washington. The Dow Jones Industrial Average (CME: YM=F) and Nasdaq 100 (CME: NQ=F) futures stayed roughly flat, reflecting cautious optimism as a 60‑day roadmap for a final deal emerged. The developments softened earlier volatility sparked by the president’s threat of strikes against Iran over Hezbollah’s actions.

Despite Iran’s claims of halting talks, officials confirmed discussions continued in Switzerland, easing fears of prolonged disruptions in the Strait of Hormuz. The waterway, critical for global oil flows, saw no immediate reduction in shipments despite ongoing geopolitical friction.

Asian Markets Rally on Deal Hopes

Regional equities advanced, with Japan’s Nikkei 225 (TSE: ^N225) rising 1.8% to extend its record‑breaking streak. South Korea’s Kospi (KRX: ^KS11) added 0.6%, building on last week’s 11% surge driven by semiconductor stocks. MSCI’s Asia‑Pacific index gained 0.8%, though Hong Kong’s Hang Seng (HKEX: ^HSI) lagged with a 0.7% decline.

Chinese blue chips outperformed, climbing 1.6% on optimism over easing trade frictions.

Inflation Data in Focus

Investors are bracing for Thursday’s release of the May Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred gauge. Analysts anticipate core PCE, which excludes volatile food and energy items, to post a modest increase from April. The outcome will shape market expectations for the Fed’s policy path, with a prevailing view that rates will stay elevated after the central bank’s hawkish June meeting.

The volatility followed the president’s warning of potential strikes, though officials later confirmed talks remained on track. European natural gas prices surged as much as 3.9%, reflecting concerns over LNG shipments through the Strait of Hormuz, a key chokepoint for global energy trade.

UK Political Shake‑Up Weighs on Sterling

The pound sterling fell to a 2026 low after Keir Starmer resigned as UK prime minister, amplifying uncertainty over fiscal policy. The leadership vacuum raised questions about future economic reforms, though analysts noted limited immediate market impact. The currency’s decline underscored broader investor caution ahead of this

This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions.